audreyh1
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Well, that is why the fishing guy (what was his handle?) often recommended having 2x your real needs as your retirement fund. Take your absolute bare-bones, no frills, living expenses, and double that to be your "plenty of padding" living expenses. So, I suppose that in this scenario, you could claim that this was a 2% withdrawal rate, but IMO it's more like you live at 4%, and only cut back to bare-bones when the portfolio shrinks appreciably.You are 100% correct - nothing is guaranteed. My viewpoint is, since so little is guaranteed, I want to at least have some assurance that my portfolio won't drop in half. So, if other bad things happen, at least I won't have that worry on top of it.
What seems 'prudent' to some, seems like 'needless worry' to others. As I said before, find your own comfort level, but I will recommend that you run FireCalc and look at those portfolio dips (NOT just the end balance), and decide if that is really something you could be comfortable with.
-ERD50
I think most of us who have retired, have made sure there is plenty of padding. So perhaps this is more of a language argument than an implementation argument. The main (but crucial) difference being whether one starts out at a super low withdrawal rate, or whether one cuts back drastically only when needed.
I'm sure the fact that I've been retired since 1999, and at present my retirement portfolio is 67% higher than when I started makes me quite a bit more sanguine about the future as I've been able to "get ahead" in the timeline scenario. In other words, my portfolio being cut in half would now mean only down 16.5% from where I started. I also know that I can cut way back if necessary, but I won't do it unless is IS necessary.
Audrey